The ongoing fallout from the Gulf of Mexico disaster will overshadow BP’s first-quarter results this week, with profits down sharply.
The explosion on the Deepwater Horizon rig three years ago this month cost 11 lives and a potential $90billion (£60billion) for BP, which is embroiled in a court case in New Orleans over the disaster. Under chief executive Bob Dudley, BP has sold more than $38billion of assets to raise funds for the compensation payout while concentrating on its core operations of drilling for and selling oil.
On Tuesday, the City expects BP to report profits for the first three months of 2013 of $3.27billion.
Tragic: A fire rages aboard the Deepwater Horizon rig in the Gulf of Mexico, USA, on 20 April 2010
This is down 30 per cent from $4.67billion in the first quarter of 2012, when BP still owned a 50 per cent stake in its TNK-BP joint venture in Russia and was booking profits accordingly.
In the first quarter of this year BP completed a deal to sell its share to Rosneft in return for $12.48billion and a stake of nearly 20 per cent in the Russian energy giant.
Only a small part of BP’s Rosneft profits has been booked in the first quarter as the deal was completed only on March 21. BP has started an $8billion share buyback programme.
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Meanwhile, the first phase of BP’s trial in New Orleans has ended. It will determine the share of blame between BP and its partners in the Deepwater Horizon rig – Transocean and Halliburton.
A second trial begins in September to determine how much oil escaped from the well and how much compensation must be paid, based on barrels of oil lost. The US government puts the spill at 4.9million barrels, 800,000 of which were retrieved by BP’s oil-capture devices.
Shell will report its first-quarter results on Thursday, with the City expecting a fall in profits compared with the same period last year of about 12 per cent to $6.43billion.